Planning to quit my C-Suite Exec Job to start a cleaning company - AM I INSANE?

[cresenda]

@mozes This guy has it exactly right. My wife tried to start a cleaning business after seeing how much they bill when she was doing short term rental management. We got a couple of months into it and realized what a huge and never-ending pain in the ass it was going to be, with limited margins after paying labor and overhead. So we went and bought a car and put it on Turo. Turo is way better than the cleaning business. We just do the one car as a side thing but if you have a fleet of 10+ cars it can become a real business.

 

[jamesm1978]

@mozes I have a relative who's been in the cleaning biz for about 10 years...seems to have a mix of corporate and houses. As far as I can tell he's never really made much money even though he's working 18 hours a day and has a ton of employees. Still lives in a mobile home. I think employee issues, insurance, equipment, supplies and CA specific costs eat up most of what he grosses.

 

[emmajeanb4u]

@mozes It works but you have less control over people and quality obviously, and less control over margins since typically contractors are paid a percentage which includes things like supplies and gas. I built a 7 figure business just with contractors.

 

[pastorpontibus]

@mozes Hey friend, I'm sure you're a good leader in your current business but you should really put more effort into understanding the entire industry before you get too far. You're really missing some basic concepts and and history. Let me fill in some gaps with a short update.

Back in 2013, a company called homejoy tried to "disrupt" the "old school" residential cleaning business by following the "everything on demand" trend. This was the wild west, they raised a pile of VC money and tried to fill the labor side of their "cleaning" business with contractors. Fast to 2015 and HJ is shuttered. They were hammered by employee classification lawsuits, burned millions in CAC with over cheap first time cleans and paid high rates to cleaners. This was the first big casualty in the on-demand race related to "employment". Since then other companies including the inventor of the space, UBER made adjustments to how they operate. This also lead to the IRS having specific requirements for GIG work. The main point being, you must run your business as a marketplace.

There are a few out there still running marketplace type "cleaning" businesses. I mentioned Tidy in a different comment. They survived by pivoting to a "software" company after seeing the same employment issues as HomeJoy. I also mentioned that they have a terrible online reputation and only survive through small margins and the scale they purchased with VC money.

To take this to the next logical step: you fund your own double side marketplace and are able to squeeze a few more cents off the CAC because of your digital marketing experience. Unfortunately, your whole idea is based on specific products you're saying you're using while cleaning. Your contractors are under no obligation to use those products and if you try to "encourage" them to, you could suffer the same misclassification issues HomeJoy and other companies have seen.

I'm sure you could use your experience to build a company for yourself and maybe even hit significant scale. However, you're idea comes through this subreddit 20 times per month. "If I have good branding and solid marketing I feel like I can beat the competition. Please help me: What's your process for cleaning? How do I find cleaners? How do I price my first job"

 

[mozes]

@pastorpontibus Thank you so much! This is massively useful information. Is there a niche you do like? Understand the main point you're making is do more research which is true and appreciated.

 

[pastorpontibus]

@mozes I like all recurring services. I prefer being not so niche and be able to provide the same kind of services across a wide demographic. I've had some services that were more specific and found them to be fragile and too reliant on factors I can't control.

For residential cleaning, I think there might be an opportunity to take on the old guard or the PE groups that have sucked up some older brands in the last few years. But I think that has to come from operations not marketing. Quality recurring services are hard to compete with. There is little incentive for customers to switch. There might also be some alternate business models that could target the problem in a different way by following the trends in employment. There are certainly opportunities, the robots aren't coming for toilets in every home for a long time.

 

[sincerelylynn]

@varzr You get what you pay for, pay bottom dollar you get awful employees

 

[varzr]

@sincerelylynn Agreed. We were paying 25% more than average and it was still a huge challenge. People who are willing to clean homes for relatively little money are going to come with problems/challenges if you pay them $15, $20 or more per hour.

 

[catechumenpatrick]

@mozes Another one who has a plan but doesn’t want to get dirty doing it. You might get some of the organic fruit cake people but down to brass tacks organic doesn’t do crap when it comes to cleaning. People look at price and that’s it when it comes to cleaning. I can tell you after 35 years in this business you’re nuts.

 

[mozes]

@catechumenpatrick I appreciate your feedback. You nailed me on not wanting to get my hands dirty, but not for lack of effort. Seems like the perfect way to get stuck in the business instead of scaling the business. My specific skills are more targeted to growth and operations than service delivery. My big question is are there enough fruit cake people in your description to enable scale that would allow me to hire for my skill gaps.

 

[marlovesjesus]

@mozes Posting here is kind of pointless, but good luck to you.

I'd tell you the majority of people 'advising' you it won't work are generally people who got stuck in the work and never got out of it.

I know people in lots of different industries who didn't "get their hands dirty" with the work and still did well. You have the bankroll and knowledge to fund somebody (your contractor) to handle the early work and then you eventually push into managing others depending if you continue contracting or w2 employee.

Best of luck, it can work but will take some time to convince the market you're actually worth using for the price differential.

I wouldn't trust any business owner who says price is the only differentiating factor, we don't compete on price.

 

[lily_pad_96]

@mozes Have you gone out and tested the market for the need and if there is differentiated need and a willingness to pay above for it? My significant other has been in the cleaning business for 20 years and the responses are spot on. Many times a race to the bottom on price, handling service employees is tough, especially now where few want to work it or are reliable.

I have been with Fortune 500: companies and the last 8 years selling enterprise software. Still amazed at how many mistakes founders make or misread a market. I have a 45 page overview on how to start a SaaS company from my experience, that isn't applicable to this thread though lol.

 

[jamesdigger]

@mozes Just my two cents as someone who has a monthly house cleaning - We expect the products are safe for our kids and pets. We buy organic fruit but haven’t gone so far as to demand that our cleaners use all organic or “healthier” products. To make me care enough, I’d need some serious, reputable science showing real affects and consequences.

There are a ton of cleaning companies and independent cleaners in our neighborhood. The biggest differentiator that I can envision is a) verified quality, like reviews from neighbors and b)ease of use. I would love to have an online portal to switch the date and time easily or send a quick note. I’d also love having add on services that were easy to add, with like one click. That kind of platform plus a focus on only the best cleaning would actually be of interest. Otherwise I’d stick with what I have.

 

[mozes]

@jamesdigger This is very helpful re: the ease of scheduling services and quick notes. Thank you.

 

[lily_pad_96]

@jamesdigger There is software for this, schedule texts, appointments etc Building a website is easy with something like WIX. Use ChatGPT or Gemini for research.

 

[lilreb85]

@mozes With your experience, network and (I am guessing) financial power wouldn’t it be better to just buy an established business? And if not interested in this why?